In parallel, I ran the article on a private website for corporate pension people and got a much less encouraging response. Hits were at a factor of around 250:1 !

The question on my mind this morning is whether interest in financial education is confined to  school and colleges.

It’s fashionable to think of the workplace as a platform for social initiatives. Workplace education would compete against educational programs on carbon initiatives, outreach initiatives etc. Employers sometimes complain that they are struggling to find slots for “production” in the commercial sense.

The primary function of the workplace is work. Initiatives such as financial education have to be commercially justified. Without going deep into theory, such a justification would need to rely on at least one of these three assumptions.

1. Financially aware staff take better financial decisions, are more stable and hence more productive
2. Employers get a dividend from an investment in financial education through greater loyalty from staff (exhibited in behaviours like not stealing/leaving/malingering and positive behaviors like working harder/smarter etc)
3. That in investing in a socially useful way, the organisation is encouraged by tax breaks.

If anyone can point me to any reliable research which looks at the first set of assumptions, I’d like to look at it. Thinking of myself, I work best when I have no financial worries. Whether the argument works that way or the other way round “I have no financial worries when I work best” is another question.

There’s a clear link in my mind between setting goals and working to them and productivity. Aimlessness leads to boredom, worry and other non-productive behaviours like going to the pub for the afternoon.

On the other hand, a healthy bank balance is not as inspirational in terms of short-term targeting (eg commission based selling) as the risk of foreclosure!

Tactically I am driven by impecunity, strategically it’s the other way round! I suspect that most employers know this which is why most long-term incentive planning (share-save, pensions etc) is confined to organisations with long time horizons.

Which brings me on to the second set of assumptions, that there’s a long-term value to the shareholders in having a workforce that is financially literate. I think it’s a gimme that companies generally want low-staff turnover (the exception is again the bolier-room sales operation). One of the arguments that Tolstoy was  struggling with when thinking of the education of the peasants was that far from being more loyal, an educated peasant was likely to set up his own farm and compete with the landlords who’d emancipated them.

The old paternalism predicates, social order and generally does not encourage mobility. This attitude is still displayed by many employers I talk to and – alarmingly – by many union officials. I hate to say it but an emancipated workforce that knows its sharesave from its pension, has less rather than more need of a union rep and is considerably more attractive to predatory recruiters. Many managers, myself included, yearn for a placid unquestioning workforce that does what it’s told and doesn’t have the nouse to answer back.

I fear that thought in theory we want an empowered workforce who works for us because we are brilliant, in practice we want a bunch of indolent slobs who are too lazy to move jobs (even if they were employable).

At least with my third and final assumption, I can be unreservedly positive. The ability of employers to pay up to £150 per head to an educator, to write that off against corporate taxes and not to incur a PAYE or national insurance charge to the employee is in place. I suspect that this generous tax-concession is under-used and remains in place for exactly that reason.

For any employer designing a flex-program, the availability of a financial makeover, delivered in work-time at no expense to the employer (eg it’s paid for by a flex of salary by the employee) is going to look a no-brainer. Unfortunately, staff don’t see it as something they should pay for – anecdotal evidence suggests that this option is poorly used.

Which brings me back to Vivi Friedgut and her Black Bullion proposition.

I reckon I would pay for an hour of Vivi or one of her colleague’s time if I reckoned the experience would be challenging, sexy and kicked (my) arse. I would expect the session to be about me, be motivational and that it would not lead to a product sell.

Sadly, the only session I have had of this kind was mostly about compliance, was dull as ditch and led to the sale of an investment product I did not want. That was then – this is now but that’s what any financial educator has to cope with by way of “legacy”.

Our experience of delivering sessions purely on pensions suggests that they can be hugely popular if they focus on people, are motivational and lead to behavioural outcomes.

The big difference between our (First Actuarial’s) work and Vivi’s centres on the stage of the work life cycle we’re targeting. We are talking to the haves, those who have a number of years under their belts, have houses, mortgages, pensions, kids and an immediate fear of what’s ahead – retirement.

By comparison, Vivi’s customers have unsecured debts, rental agreements, hangovers, STDs and attitude. Their fear is tactical whether the hole in the wall will cough up sufficient to pay for the night out. I know I was that person and fear I may return to such a state unless I bump up my pension contributions!

Maybe there is a third market , maybe the people who are prepared to pay for the financial education of young people are those who bail them out, the parents. Maybe the flex option should not be about a financial makeover for the parent , but a financial makeover paid for by the parent and delivered to the errant child.

I have seen sexier eighteenth birthday presents but I can’t think of many better!

Put our way – this could be a “fortuitous intergenerational transfer”.

Related articles

• Keeping kids solvent (henrytapper.com)
• Can Wonga lecture on responsible finance? (newstatesman.com)
• The NFECs’ Employee Financial Education Program Launching February 2012 (prweb.com)
• Financial education ‘must be a priority’ (nzherald.co.nz)
• Why we shouldn’t give up on pensions. (henrytapper.com)
• Comment: Politicians should bow out of pensions (scotsman.com)
• Is your company good to retire from? (henrytapper.com)
• How can you tell if your pension’s any good? (henrytapper.com)
• Can we make pensions simpler? Please? (blogs.confused.com)
• Can GPP providers be a little clearer about commission? (henrytapper.com)
• Financial Education Program Provided Free to Businesses by Nonprofit Charity (prweb.com)
• Benefits of Financial Education in the Workplace (notsocorporatewellness.wordpress.com)
• Pension Corporation points the way to “ambitious pensions” (henrytapper.com)

Elvis Costello

He set up the show like some 60′s Vaudeville Act complete with a wheel of fortune from which selected members of the audience suggested songs. He swaggered around like a circus ringmaster swinging a cane he claimed had Rupert Murdoch’s head on a pike.

 In 1978 I had been pressed to the stage by 2000 pogo-ing punks clad in leather , showering beer , snot and phlegm over my head. Costello played for twenty minutes.

Times have changed, I was politely asked to sit down when I stood to applaud the great man’s arrival. Costello played for two and a half hours.

What a thunderbox of a set he played. Virtually everything from This Year’s Model, large chunks of My Aim is True, Punch the Clock , Imperial Bedroom and that album with the elephants on it which contains Oliver’s army.

Not everything was perfect. Steve Naive sounded a bit cheesy in the latter stages of Alison,  the lack of a lead/rhythm guitar combo hurt  Watching the Detectives and we had an overlong Wheels of Fire with a Van Morrison Style Blues inserted in the middle.

Put those minor quibbles aside, medleys such as Please Please Me which morphed into No Dancing and Be My Baby was brilliant. The band of Bruce Thomas and Steve Naive, supported by a suitably low-key session bassman were beat perfect. Thomas’ drumming has lost none of its urgency while Naive has adopted the new technologies at his fingers to produce layers of sound that overcame the four-peice restrictions.

The Imposters  performed  a Chuck Berry classic . Costello brought out a Gibson Super 400 the one in the picture above this, his playing has improved some since he posed below with his strat. But it  was with his acoustic that he seemed most at home.

 Costello was loquacious - his verbal interplay with the audience suggested that he has finally accepted he can talk as good as he writes. Apparently he’d sung “Chuck Berry” to Leonard Cohen and Chuck Berry at the song-writers awards in Boston (such is the status of the man- I was sorry when he told us “I didn’t win”).

And he seems to have lost all inhibitions with his audience, steaming round the auditorium, dancing with fans in a go-go cage and chatting up the female contestors who all turned out  to be his sisters.

It was only the spectre of Margaret Thatcher entered the auditorium that the anger returned.; a stunning final half an hour saw Costello rattling though classics that included Green Shirt, Pump it up as well as the great hymn Ship Building and the angst of Tramp The Dirt Down. He finished with Oliver’s Army and a truly memorable “What’s so Funny Bout Peace Love and Understanding”.

The man is still angry, he’s still got it and if you get a chance to see him on tour- go for it -short of Leonard Cohen at the Hop Garden this summer, I don’t expect to see a better gig.

Related articles

• Elvis Costello – review (guardian.co.uk)
• Elvis Costello, SECC, Glasgow: review (telegraph.co.uk)
• Elvis Costello & The Imposters (seattleweekly.com)
• Sluggo’s Video Of The Day: Elvis Costello “Watching The Detectives” (kroq.radio.com)
• Elvis Costello Concert Review: Spin The Wheel! (socyberty.com)
• Bringing out the big wheel, Elvis Costello highly entertaining at the Hard Rock (pbpulse.com)
• Listen: Elvis Costello, Keith Richards, Paul Simon, Salman Rushdie pay tribute to Chuck Berry and Leonard Cohen at JFK Library (thephoenix.com)
• Elvis Costello – The Return of The Spectacular Spinning Songbook (thevpme.com)
• Elvis Costello revels as ringmaster of rock variety show (theweek.co.uk)
• Elvis Costello Performs “Brilliant Disguise” + “Fire” on Late Night with Jimmy Fallon (wcbsfm.radio.com)
• Elvis Costello and the Imposters: The Return of the Spectacular Spinning Songbook (Review) (popmatters.com)

City’s injury time miracle was played out on our iPhones as we watched the World Sevens at Twickenham..Chelsea‘s eleventh hour heist in a Brentford pub.

The blue and white hoops of Reading go up, those of QPR stay up and the stripes of Wednesday smile down on Utd , struggling to get past the blues of  Huddersfield.

It seems “written in the Stars” certainly if you are our Gary who used this phrase so often that he was banned from using it again in the second half. Gary got so excited that he used it again and again and again, each time with an apology but no less annoying for that. His euphemisms ”their name’s on the cup” and “it was meant to be” were little better.

Fortunately, we have a lasting testament to the drama in Alan Green‘s magnificent commentary “come on Didier” will surely become a defining in his career.

These random thoughts are about all that I can summon up this morning. Yesterday gave us Frankel the Wonderhorse winning th Lockinge at Newbury, the obnoxious Sam Allardyce showing us just why we like Roberto Matteo and Mr Holloway so much better (thumbs down to West Ham’s arrogant assumption of premiership status). Saturday gave us Leinster trouncing Ulster (and no Ulster did not put up a fight), it saw Stuart Broad nearly get his hat-trick a day at a time. Saturday saw more sport than I could properly digest and what you are reading  is it’s half eaten scraps sitting like our breakfasts, not knowing where to go from here.

On that unpleasant thought, I will shut up and consider the purchase of a bicycle for my son, so I can get him off the couch and doing something positive.

When the summer comes.

Related articles

• Ulster v Leinster, Heineken Cup final: live (telegraph.co.uk)
• Ulster v Leinster: how the players rated in the Heineken Cup at Twickenham (telegraph.co.uk)
• Ulster 14 Leinster 42: match report (telegraph.co.uk)
• Looking groovy: England’s rugby sevens teams unveil new-look “disco” kit (mirror.co.uk)
• Ulster v Leinster: how the players rated in the Heineken Cup at Twickenham (telegraph.co.uk)

You can read about this in her own words here . The big idea is a simple one, saving money is as much about spending it wisely as investing in financial products, she talks about frugal cooking, getting the most from your petrol tank and buying the right kind of debt.

She’s got some straightforward advice for parents and if you’ve got a second or two to spare after reading this, make sure you read this article  http://www.blackbullion.co.uk/blog/?m=201204

We met on Thursday, she arrived with an aubergine, a tomato  with a number of bananas and a huge smile.

We talked for an hour about her career , her business Black Bullion and its business model. Hers is a commercial enterprise, she competes for scarce resources to get higher education authorities to sponsor her to speak with students about financial prudence. Her edge is that she is talking as a young person unashamedly using herself as a role model.

Talking to her, I realise that people like me , in our fifties, can encourage but we have neither the image, energy or empathy to do what Vivi does.

My student days are still fresh in my mind – I could take advice from my peers but not from my parents.

Britain is filled with well-meaning educational groups - usually sponsored by financial institutions. Promoting financial education in schools and colleges is an essential step on the way to a knighthood for a senior business person.

I suspect that why most of these groups have proved ineffective is that they are patronising and pathetic to the people who are being subjected to well-intentioned lecturing.

Talking to Viv and reading her blogs, I reckon she has answers that resonate with young people. Here she is on Citywire explaining her personal motivation http://www.cityam.com/forum/former-banker-says-saving-must-begin-school

Will those who talk the talk on financial education be prepared to employ her edgy, sexy and challenging approach to financial management for the under thirties?

I intend my firm to be at the front of the queue. I reckon there will be a few Human Resources Managers joining us.

Meeting expectations?

The Pension Play Pen had a debate last November when we tried to set an order of importance on the six things that the Pension Regulator said , made for good DC pensions (outcomes as they call them).

The top of the list was “contributions” with the old truism that the more you put in , the more you get out, but this seemed to me a weak argument. You can pour a lot of water into a leaky bucket and still carry more water to the trough than a small amount of water in a trusty bucket. When water or money is in short supply, we look to the efficiency of the bucket.

My answer to my question is “efficiency” a good DC pension is one that efficiently transfers money in into pension out.

From this we may deduce that the measures of a good DC pension scheme are to do with efficiency.

Compound interest, the 8th wonder of the world as Einstein’s supposed to have called it, does weird things. Over time, it can distort financial results  through tiny fractions of interest change. Bankers talk about “PV01” the present value of a 0.01% change in interest rate changes over time (or duration as they’d say). It’s an important number.

We do a lot of work trying to help people see the importance of a 0.01% change in the charges on a pension scheme. To use our banner headline, a 0.20% reduction in a charge on your pension fund makes as much difference as you paying an extra 1% into your pension (over 35 years). Put it another way, for a 30 year old, reducing the pension annual management charge from 0.7% to 0.5% is like giving him or her a 1% pay rise.

As a rule of thumb, if your DC pension plan has a charge of more than 0.7% pa on the fund, you are probably in an ineffecient arrangement.

Now I’d really like to say that all this is dwarfed by the differences that you can achieve by getting your investments right but I can’t. Not because a difference in fund returns of 0.20% is just as important as a differential in charges but because you have very little real control of the return you get on your investments. You have (if you are the person negotiating the pension charges) every chance of negotiating a 0.20% reduction in charges.

I hear a huge number of my friends in pensions throwing their arms up in disbelief at the last statement. Is Tapper saying that we cannot improve investment returns to members of DC plans? My argument is that the only way we can substantially improve the returns people get is by influencing the investment decisions they make. The fractional improvement in returns we can give people are achieved by altering the fundamentals;- increasing shareholder value through good governance being an example. I do not believe that as a society we can stock-pick our way to a happy retirement. Across the board, stock-picking is a zero-sum game where the winners and losers are in equal measure and the only sure fire money-maker is the stock-picker who takes none of the risk but pockets a % of the fund. Roulette is the business model with the active manager’s charge equating to “OO”.

So in my world, the charge on your pension savings is the most important element of a good DC pension followed by the availability of the right investment choices, presented so that suitable choices are made is the second.

The third element that I look for when I look at a pension scheme is the help given to members when they really need to take the right decision (eg when they come to cash in their fund and buy a pension- see my recent blog on this). More money is wasted on bad decision making here than is wasted on trying to get out-performance from stock-picking (which is saying something).

Trailing in behind these essentials are the Pension Regulator’s other criteria

Assets in funds must be safe – important for those ski-ing off piste but for those on the superhighways of default funds- this is a gimme- it is not the big deal.

Administration must be sound;- you’d have to be unlucky now to pick a pension provider who screwed up. Again, sticking to the mainstream players who employ straight through processing to the whole kaboosh should make administration a hygiene factor  – this is more an issue for legacy unbundled pensions which most people have very little exposure to.

So to sum up, when I do my Arthur Negus bit and look at a company pension scheme, the first thing I look at is the charge that is being paid, then I look at the way the investments are set up, then I look at the help for people retiring, then I look at the admin and the security of the set up and then I ask the question- is this pension worth paying into?

Funnily enough, when the answer to this is “yes” contributions made by members and their sponsoring employers tend to be high, when the answer is “no” they tend to be low, But there are skews.

The skews are created by “advice” or at least the concept of advice that’s been promoted by those “enrolling” members into DC plans (typically GPPs and stakeholder pensions).

The skew is created by performance fees and the way it is paid. The performance fee is paid as a commission to the company enrolling you into the pension. If you do not sign up, no fee is paid and the enroller has failed, if you sign up , up to 0.5% of your fund per year (till you take your fund) is taken as a charge. This money is either paid on the drip to the adviser or is paid over up front as an initial commission which can be as high as 25% of your first year’s contribution.

This commission is justified by advisers and providers as necessary to pay for the “advice” given to those about to enroll. Since this advice usually amounts to the words “sign here”, you might consider this money for old rope but that’s unfair. The commission covers all the expenses the adviser incurs including compliance with regulations, travel , risk and marketing costs.

Ironically , this practice can lead to close to 100% take-up of expensive, inefficient pension schemes.

The point is not that the advisers are ripping people off; the point is that most of the cost is totally unneccessary. This is leaky bucket stuff.

There are three reasons why this will come to an end. Firstly, this market efficiency will self-correct. People will not put up for ever with the inefficiency of enrollers being paid as advisers but acting as postmen. Secondly it is fundamentally unfair and to a Regulator who’s credo is “treating the customer fairly”, it is an unsustainable practice – hence the retail distribution review’s strictures on adviser charging on corporate pensions. Thirdly, Government has worked out that a system of auto-enrolment where people have to opt-out rather than opt-in to being in the pension plan, will solve the problem of people not joining without the need for an adviser to be paid to extract signatures from reluctant savers.

We’ve yet to see whether the “apathy sale” will work but whether it does or not, the combination of market, regulatory and legislative pressure is going to do for the market skew I’ve outlined above.

Increasingly , I believe that we will start looking at DC pension plans in the UK as the Americans look at mutual funds. The Americans talk of “load” and “no-load” funds, the former carrying a commission loading for sales and advice and the latter being free of advice and commission.

I think that UK employers will increasingly see their role as providing “no load ” pensions that are seen by employees as good because they offer low charges and default positions that do not need advice. If they also offer strong governance from either the provider or from the employer via a governance committee or a trustee board – so much the better - this itself will be seen as part of offering a good DC pension. Employers who encourage higher levels of contribution either by throwing money as employer’s contributions or offering matching contributions or using salary sacrifice (or best- all three) will once again become employers of choice.

However, employers who do nothing to take the current loadings out of their pensions and continue to allow their staff’s funds to be eroded by unnecessary commissions, will be seen as uncaring , inefficient and lacking in general governance. Market , regulatory and legislative pressure will eventually force them to change and when they do, they will wish they had got their act together sooner.

If this sounds like a commercial – too right – it is! If you are an employee empowered to do something about your company’s pension or even if you’re not but would like to be, it’s time to pay attention. Get on down to your IFA and tell him you want to move to a no-load pension, you want to review your investment options , get your at retirement support right and make sure contributions to the new scheme are as efficient as possible. If he looks blankly at you, contact me @ henry.tapper@firstactuarial.co.uk.

If you are not directly influencing your company’s pension decisions, print out a copy of this article, highlight the previous paragraph and put it on the desk of the person who is!

It’s time to restore faith in British pensions, this is not going to be easy and it’s going to involve some fundamental changes to the way we do things. Upgrading the stock of company pensions is a part of the fundamental change and like all change it will only happen because of strong leadership – from you!

Here is Clyde & Co‘s response to my feedback that I could not find a telephone number for their company on their website

Dear Mr Tapper,

We are sorry to hear that you have experienced difficulties navigating the Clyde & Co website, we endeavour to make the user experience as simple and efficient as possible.

The London office telephone number can be found on the London office page, as part of the Location tab. A link to this page is below for ease, or in the signature of this response.

http://www.clydeco.com/offices/london/location

Kind regards,
Clyde & Co LLP

The St Botolph Building | 138 Houndsditch | London EC3A 7AR | UK
Main +44 20 7876 5000 | Fax +44 20 7876 5111 | www.clydeco.com
The merged firm of Clyde & Co and Barlow Lyde & Gilbert

Well aren’t I just the stupid one!

This is what I “heard”….

I’m surprised you couldn’t find what you wanted,  we do our best but we can’t cater for numpties.

The number’s there alright and just look how elegant the path is to it. If you are too thick to press the link, the number’s at the bottom of the email.

You don’t get my name – I am Clyde & Co

The Clydeco website is very grand, it’s full of drop downs and clever little features. It is very fond of itself.  There is nothing about it that hints at compassion or humanity.Is it designed to impress or intimidate?

It looks grand but it doesn’t work.

There is no reason why I should expect to find a telephone number on a “location” page. My searches took me to where Clyde & Co wanted to take me, not where I wanted to be.

Navigating the website was like wandering around a big office late at night with  all the office doors locked.

Typical of the ClydeCo website is the “contact us” page.  I had expected  it would give me a telephone number – lawyers do have telephones and you’d have thought they’d like to speak to clients and prospects.

But the contact page seems to be a data capture mechanism designed to take up customer’s time in form-filling . It gives away nothing and sucks you into a series of unwelcome disclosures.

At least the inbox is answered (creditably quickly).

I suppose whoever sent the e-mail has met some KPI in terms of response times but that’s about all that could be positively said about the response.

The reproof in the first sentence of the e-mail is in the tone, the sentence has no less than seven triple syllable words. I am left in no doubt that I am on the naughty step! No doubt who is the Latin scholar around here!

For the “avoidance of doubt”, I “have trouble”, I do not “experience difficulties”, I “try”, I don’t “endeavour” and I don’t have “user expereriences” -ever! “For ease”, please do not use that phrase!

Look- I don’t need the number any more- I spent my 80p on directory enquiries- I was trying to help you with some feedback!

Even the messI age..

A quick text

“sorry-o20 7876 5000″.

would have been better but howabout….?

Yes- we see what you mean-it’s not easy to find the number- we’ll do something about it

What I got was crafted toput me down. No wonder the legal profession has the reputation it has.

Many people go to legal sites for highly sophisticated content but people  like me go to get a telephone number to avoid calling directory enquiries. Though our needs are humble , they are valid!

Clyde & Co, you won’t be getting much work from me if this is your way of dealing with people. 

 I like to recommend companies that put people first and use the internet to help people , not to show off.

I told him about my family’s trip there on Saturday.

He told me about Old Trafford.

They get 75,000 people on a matchday- they know how to manage crowds.

The Olympic experience arrived in Manchester in the form of a recent rehearsal at the ground. The idea was to test Old Trafford’s capacity to manage an Olympic size crowd.

I asked him what he thought of the Olympic Security team.

Paranoid

I wonder whether , like the wasp trapped in the jar, the terrorist will escape twice as determined to wreak havoc.

More likely , the terrorist is putting his feet up , his work is already done.

Related articles

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• Manchester United fans face extra searches at Old Trafford as West Brom clash becomes Olympic trial (menmedia.co.uk)
• Team GB poised for Olympic draws (bbc.co.uk)

Compliance – it’s not easy and the burden is going to fall on payroll- as it always seems to. Payroll have been doing pension’s heavy lifting for long enough now to deserve a little more recognition.

Investment; beyond what you have to do, there’s an opportunity to pay a lot more into you and your staff’s pensions. Even if you pay the bare minimum, the money has to be managed by someone and how it’s managed , the cost of management and the monitoring of the managers is crucial to the size of the pension at the other end.

Trust- some of the best schemes in the country including the public sector schemes over which half a million are striking today - are distinctly unloved. Ironically, no one’s striking on behalf of the five million Brits who have no pension at all. Whether you are pension poor, pension rich or in the middle, the chances are you are fed up with the word pension. Winning people’s trust back int the process of retirement saving, of buying an annuity and of providing security for themselves and their family in later years will be the hardest challenge of auto-enrolment,

Compliance is the foundation on which all else is built. If you are an employer, an understanding of what Auto-Enrolment is, why it’s there and how it works needs to be spread throughout the operational function. Whether you are a mega -corp or a one or two man band, there will be no excuse for not knowing  what to do and – doing it!

Once the ops guys know what they are up to, it’s up to the executive to make the strategic decisions on investment. Is the company going to invest in staff pensions beyond the basic compliant levels , if so why? How is such an investment justified to shareholders? Is it sustainable? Conversely, is failing to invest a risk in itself?

The product that manages the money whether NEST or one of the other mastertrusts, the company’s own pension scheme or a pension issued by an insurance company via a group personal or stakeholder pension has to be fit for purpose. Investing in a rusty bucket of a pension plan means that the investment leaks away in high charges and poor management practices. These pension plans need to be right at outset and continue to be right for the needs of the staff. The investment needs to include money for making sure that the mechanism is maintained in pristine working order – remaining fit for purpose,

Trust-in practical terms, there is no other way of getting your staff to understand pensions than by taking them aside and talking with them. Apps are great, Facebook pages, interactive modellers, self-service admin sites – they’re all great. But they don’t amount to a row of beans against the effectiveness of a one to one engagement with a pension expert. For most companies, the pension experts are either in place or waiting to become experts. No company can afford to buy all the individual advice needed to empower people to become “their own CIOs (Chief Investment Officers) but we need to create internal infrastructures of pension experts who can make sure people know what’s going on and know about the key decisions they need to take- especially when they get to retirement.

So there you have it- three key areas for you to concentrate on CIT -compliance- investment and trust. Get the compliance right, get admin 100% watertight with straight through processing, no manual intervention and processes in place for everything and you are half way there

Get a decent pension provider, get your pension management at the right cost, don’t be afraid to negotiate and make sure you know what you’re paying for and why. Take advice on the default fund- it’s the most important. Make sure you have a mechanism that works to help your member make the right choices at retirement.

Finally, for heavens sake, go out and talk with your staff. Get them to understand the investment your company is making, the effort it is making to get the pension plan right and the ongoing governance in place to keep the pension up to scratch. Make sure that those people who are interested in pensions become your pension champions and make sure that those whoa aren’t get properly looked after with default choices that don’t tax them to make decisions they do not want to take.

Above all else, be enthusiastic. If you approach auto-enrolment in a mindset that it’s going to be a nightmare- it will be a nightmare. If you don’t get it , give me a call and I’ll show you how your company pension arrangement can make a difference to the happiness, productivity and long-term well being of your staff and by extension your company.

Related articles

• What have the Australians done for us – not much! (henrytapper.com)
• Auto-enrolment – winners and losers. (henrytapper.com)
• Pension Corporation points the way to “ambitious pensions” (henrytapper.com)
• The workplace pension changes that affect you (confused.com)
• Who pays for a register of pensions? (henrytapper.com)
• New national pension scheme gets the go-ahead (confused.com)
• Is your company good to retire from? (henrytapper.com)
• Top News! – Scrap national insurance on your pension payments! (henrytapper.com)

Risk Management road sign (Photo credit: Wikipedia)

Is this a stupidly obvious or obviously stupid question?

If you fall into the “stupidly obvious” camp you are one of a dwindling band of devotees of the paternalistic culture that believes that a lifetime’s work with an organsiation should be rewarded with a seamless migration into a properly funded later life. If you fall into the “obviously stupid” camp, you reckon that once your employer has given you your living, it owes you no more.

However we may moan, the majority of large UK employers still regard the retirement of their staff as something that matters to them. The shift from reward to risk is obvious, employers now talk more about the risk of not being able to say goodbye than their moral obligation to see long servers right. But in practical terms, the issue is the same “how can we make it easy for our staff to wind down and stop working?”.

As we shifted from DB to DC, wr rightfully recognised that there was a transfer of risk from employer to employee but this transfer has been defined in terms of investment and contribution risks. Make sure people join, contribute and invest sensibly job done.

The job is not done. Thousands of people who joined DC plans, contributed properly and took studied investment decisions are now looking at retirement incomes arising which are derisory relative to the projections given to them when they signed up.

Ok – part of this is down to investment returns but the big part of the problem is that the annuity conversion rates are up to 40% worse than on those original projection statements.

We know that the majority of people buying annuities do not get the best deal available to them and that most of them do not have access to the advice that even gets them to the point when they take an informed decisions.

We know that employers plough millions into DC pensions and more into advice about investments, governance committees and the paraphernalia that surrounds “employee benefits”.

But we know nothing about what happens when an employee, whether in the company pension scheme or not, reaches retirement. At best he will get a party but for the most part, those people leaving employment in their sixties (and often fifties) are leaving for an uncertain future of part time jobs, diminishing savings uninformed financial purchasing and “nugatory” pensions.

We do not need it to be like this.

If the army of people who sell employee benefits are to maximise the value of their efforts, they’d better realign themselves towards the needs of the burgeoning ranks of those moving out of the workplace because they are too old, too knackered and unskilled in many of the new jobs that we are training our youngsters into.

As I am patently one of these oldies, I am writing as much to engender the help of others for me as a ”cri de couer” to my colleagues who are capable of providing the services I need. I do not feel conflicted! I feel uniquely able to call for change!

I want my company to help me to retire, I want to help other companies help their older staff retire and I want people like me to kick up a fuss so we don’t end up in some “Toy Story” situation!

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